[Congressional Record Volume 140, Number 12 (Wednesday, February 9, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 9, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  ELIMINATE SSI BENEFITS FOR PRISONERS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Massachusetts [Mr. Torkildsen] is recognized for 60 
minutes.
  Mr. TORKILDSEN. Mr. Speaker, one of the worst failures of Government 
in recent memory has been the welfare system. For too long, welfare in 
the United States has punished those who want to find a job and get off 
welfare, and rewarded those who abuse the system, and waste taxpayer 
dollars.
  Yesterday, I read two articles from the Pultizer Prize winning Eagle-
Tribune from Lawrence, MA, which detailed two single parents caught in 
the trap of welfare for over 20 years, and felons who were collecting 
welfare benefits, even though the law prohibited them from doing so.
  One parent with five dependents received welfare and child support 
cash payments totaling $30,168 per year tax free, or the equivalent in 
taxable income of $45,434. Another parent with four children received 
welfare cash payments of $25,716 per year tax free, or the equivalent 
taxable income of $38,730 per year.
  One parent who was 45 years old said, ``I'm scared to go back into 
the work system at my age. I find it easier for people to stay on 
welfare once you're on because you get more benefits.'' The other 
parent said, ``Many years ago, there was no way to cheat welfare. Now 
it's a piece of cake. The system is hard on people who need it and easy 
on people who don't.''
  Yet at the same time welfare was trapping single parents, it was also 
rewarding those who had no reason to collect.
  Tonight, I want to focus on two more articles that focus on key 
problems. One deals with the cost of fraud in the welfare system. But 
the first, and the one I hope every American would find outrageous, is 
that convicts in prison for misdemeanors are still legally able to 
collect SSI. While felons are prohibited from collecting, those 
convicted of misdemeanors can still collect while serving time. This 
means that in most States, they could be serving up to 1 year, and in 
some States, they could be serving up to 2\1/2\ years, and still 
legally collect SSI.
  The first article is entitled:

                     In Jail, Convict Gets $29,892

                          (By Brad Goldstein)

       On Sept. 14, 1992, Andrew Filomia, 45, of Lawrence, was a 
     signature away from pocketing as much money in one day as 
     most people make in a year.
       A U.S. Treasury check for $29,892 in Title II Social 
     Security benefits was delivered to Mr. Filomia at the Essex 
     County House of Correction in Middleton.
       Mr. Filomia was serving a two-year sentence for violating a 
     restraining order taken out by his mother.
       Essex County Sheriff Charles Reardon found the check in a 
     routine inspection of inmate mail, confiscated it and sent it 
     back to the Social Security Administration.
       He said he believed inmates were not entitled to collect 
     Social Security behind bars. He was wrong.
       State welfare rules prohibit anyone from collecting state 
     public assistance while locked up. Prisoners are also 
     supposed to lose Supplemental Security Income benefits. And 
     federal law bars Social Security benefits for felons behind 
     bars.
       But nothing prevents someone serving time for a misdemeanor 
     from collecting Social Security benefits while taxpayers are 
     providing room and board in a jail or prison.
       (The loophole in the law is the result of the notorious 
     ``Son of Sam'' case.
       In the late 1970s, David Berkowitz, also known as Son of 
     Sam, applied for and received Social Security benefits while 
     serving a life sentence for a series of murders in New York 
     City.
       When the news got out, Congress rushed to pass a law to cut 
     him off.
       ``Congress said as convicted felon could not collect any 
     kind of Social Security behind bars,'' Social Security 
     spokesman Kurt Czarnowski said. ``The obvious example they 
     were trying to prevent was Son of Sam.''
       But Mr. Filomia was entitled to receive the money because 
     his crimes--which also included committing forgery and 
     larceny under $250--are all misdemeanors in Massachusetts, 
     not felonies.
       Mr. Filomia's brother Ralph, of Monsey, N.Y., said the 
     $29,892 check represented 2\1/2\ years of retroactive 
     disability benefits for his brother. He said he sent the 
     check to Middleton jail so Mr. Filomia could sign it to be 
     cashed. Ralph Filomia said he was following the instructions 
     of his brother's social worker in New York.
       ``I didn't want to forge his check,'' Ralph Filomia said. 
     ``I thought I was doing the right thing. Some guard who 
     doesn't make that much in year was jealous and sent it 
     back.''
       Mr. Filomia, who has a record that includes convictions for 
     breaking and entering and possession of heroin, contacted 
     Merrimack Valley Legal Services. A lawyer for the agency went 
     to bat for him by contacting the sheriff, who referred the 
     lawyer to Social Security.
       The money was returned to Mr. Filomia--although after the 
     sheriff complained, Social Security initially withheld 
     $6,000, representing the time Mr. Filomia was locked up.
       Mr. Filomia appealed to a federal judge to recover the rest 
     of his money.
       The outcome of the appeal is not known. But Social Security 
     officials made it clear criminals serving time for 
     misdemeanors are not supposed to lose Title II benefits.
       Title II benefits go to retirees, disabled people and 
     survivors.
       ``He's not in on a felony rap,'' said Gene Ervin, regional 
     inspector general for the U.S. Department of Health and Human 
     Services. Mr. Ervin declined to discuss what disability made 
     Mr. Filomia eligible for Social Security benefits.
       ``There are a lot of things that cause me to scratch my 
     head as regional director for investigations,'' Mr. Ervin 
     said. ``This is not a unique type situation.''

  Mr. Speaker, believe it or not, this convict collected $29,892 while 
sitting in prison, and the Federal law said it was perfectly legal.
  Last year, I filed H.R. 3251 to end the payment of SSI to any convict 
in prison. H.R. 3251 won't solve every problem with the welfare system, 
but it will end one glaring and blatant abuse by stopping welfare 
payments to prisoners.
  The next article in the series I would like to read, deals with fraud 
in the welfare system, entitled:

                 Fraud Often a Crime Without Punishment

                          (By Brad Goldstein)

       Lawrence sanitation worker James R. Gerry was asked for 
     some identification when he walked into a Boston bank last 
     fall to cash a check from the City of Lawrence for $25,000.
       He used his Massachusetts welfare card.
       But Mr. Terry apparently failed to tell the Department of 
     Public Welfare about the money, which represented a 
     settlement of his worker's compensation claim.
       Carmen ``Cookie'' Hernandez also failed to tell the welfare 
     department something: She was operating her own business 
     while collecting $668 a month in Aid to Families with 
     Dependent Children, or AFDC, plus food stamps and Medicaid.
       It is illegal to collect welfare while also receiving 
     workers' compensation or owning a business, unless the 
     outside income is reported.
       But Mr. Terry and Ms. Hernandez have been able to beat the 
     system.
       Their stories are typical and illustrate what is wrong with 
     the way Massachusetts deals with fraud.
       Often welfare fraud is a crime without punishment.
       In some cases, as in Mr. Terry's the fraud is never 
     uncovered because applicants are poorly screened and routine 
     checks are not performed.
       In many other cases, as in Ms. Hernandez', investigators 
     know or should know but still do nothing.
       And even when welfare cheaters are caught, most still get 
     away with it.
       The bottom line: fraud costs taxpayers tens of million of 
     dollars, while helping erode benefits for the majority of 
     recipients who need public assistance to survive.
       A year-long investigation of the welfare system by The 
     Eagle--Tribune found:
       Welfare workers and investigators fail to perform many 
     basic checks that could head off fraud or uncover it after it 
     has occurred.
       Thousands of suspected fraud cases are backlogged and will 
     eventually be dropped with no investigation because 
     investigators have too many cases. The Lawrence welfare 
     office, the state's third busiest, has only two fraud 
     investigators--half as many as it had in 1989.
       A pilot project at a welfare office in Dorchester found 
     significant fraud and saved taxpayers more than than a half 
     million dollars simply by having a part-time welfare 
     investigator perform basic background checks.
       Even when welfare cheats are caught, odds are good they 
     will not be punished. Most cases are settled out of court, 
     with an order to pay restitution.
       More than $100 million in restitution is owned to the 
     state; most will never be collected. (Story, Page 5.)
       Meanwhile, state officials mislead the public about the 
     extend of fraud. (Story below).


                     Computer finds double-dippers

       James Terry was one of the subjects of a 1991 Eagle-Tribune 
     special report on problems in the worker's compensation 
     system.
       His name popped up again when a computer match of welfare 
     and workers' compensation records by The Eagle-Tribune found 
     137 people, including 11 city workers, collected both types 
     of assistance during the last two years.
       They received $1.6 million in tax-free workers' 
     compensation.
       Only eight people--5 percent--reported the money to welfare 
     as required by law.
       Mr. Terry was not one of them, welfare records indicate.
       The city tried to fire the 43-year-old sanitation worker in 
     April 1989 for absenteeism and failure to take a drug test 
     and physical examination.
       But Mr. Terry had already filed for workers' compensation 
     for a back injury.
       The city paid Mr. Terry $3,000 to settle has case, but he 
     later appealed to get back on the workers' compensation 
     payroll.
       Meanwhile, he went on General Relief welfare in May 1991. 
     Until his eligibility ran out in April 1992, he collected 
     $339 per month, plus $93 in food stamps.
       In January 1992, while still on welfare, Mr. Terry won his 
     workers' compensation appeal and was placed back on the 
     payroll, at a tax-free $220 a week. The city was also ordered 
     to pay Mr. Terry $25,406 in back wages.
       Welfare recipients are required to report outside income, 
     including workers' compensation, so it can be deducted from 
     their benefits.
       If Mr. Terry reported his workers' compensation, there is 
     no evidence of it in welfare records.
       Mr. Terry was no longer on the welfare rolls last October 
     when he finally received and cashed the $25,000 check for 
     back wages. But he was still required to report it since the 
     retroactive pay covered part of the time he was on welfare.
       Shortly after cashing the check, Mr. Terry quit his city 
     job. He told a supervisor ``it was time to get a real job,'' 
     according to the supervisor.
       There are other questions about Mr. Terry's case.
       While collecting workers' compensation, he gave his address 
     as 155 Ferry St., Lawrence. He listed a different address 
     with the welfare department: his father's house.
       If Mr. Terry was living at 155 Ferry St., another welfare 
     rule was broken because his wife Sharon Terry, of 155 Ferry 
     St., was collecting Aid to Families with Dependent Children. 
     The rules prohibit AFDC for women who are living with the 
     father of their children if he has another source of income.
       There is also evidence of a third possible violation of the 
     rules involving the Terrys.
       Lawrence Licensing Board records show while collecting AFDC 
     Mrs. Terry earned $6 an hour as a bartender at the Berkeley 
     Social Club. Like her husband, Mrs. Terry appears to have 
     failed to report any outside income.
       The president of the club confirmed signing the document 
     listing Mrs. Terry as an employee but refused to say if she 
     still works there.
       In a brief interview as he was coming out of 155 Ferry St., 
     Mr. Terry denied he lived there or received public assistance 
     while collecting workers' compensation.
       ``Why are you trying to make my life miserable?'' he asked 
     before driving off.
       In a separate interview, Mrs. Terry also denied her husband 
     lived with her. Wearing a gray Berkeley Social Club T-shirt, 
     Mrs. Terry said she worked at the club 15 years ago but 
     denied working there while collecting welfare.


                        Computer finds violators

       There was little risk Mr. Terry or the other 128 welfare 
     recipients who failed to report workers' compensation would 
     be caught.
       The state does not perform computer matches of welfare and 
     workers' compensation records. It also fails to check many 
     other readily available public records.
       Industrial Accident commissioner James Campbell, in charge 
     of the workers' compensation system in Massachusetts, said he 
     would like to conduct matches with welfare to weed out 
     double-dippers. But he said the state cannot do matches 
     because the welfare department's computers are outdated.
       Glen P. Fealy, director of the state Bureau of Special 
     Investigations, or BSI, the agency responsible for 
     investigating welfare abuses, agreed workers' compensation 
     could be a fertile ground for his investigators.
       But he also said inefficient computers prevent matches. 
     ``We don't have the tools to work with,'' Mr. Fealy said.
       Welfare commissioner Joseph V. Gallant questioned the value 
     of computer matches to catch welfare cheats. ``You have to 
     weigh what it costs to do the matches to get one or two 
     people,'' he said.
       The Eagle-Tribune found dozens of possible welfare abuses 
     in the Lawrence office by using a personal computer to match 
     welfare records with such public records as arrest reports, 
     court and jail records, business certificates, and lists of 
     overdue parking tickets and abandoned properties.
       Seven Greater Lawrence residents were found to be running 
     businesses while collecting public assistance.
       Thirteen received welfare here while registering cars in 
     New Hampshire. A husband and wife each received General 
     Relief benefits while registering their car from a Hampton 
     Beach motel.
       Registering a car out of state is one way to hide assets.
       A dozen people were found using abandoned properties to 
     collect some form of public assistance. In one case, a man 
     stayed on the welfare rolls for five months after a 
     suspicious fire destroyed the home where he was supposed to 
     be living.
       Mr. Gallant said the welfare department does computer 
     matches with tax and unemployment records to find people who 
     are working while collecting welfare.
       But welfare cheats know they will not be caught if they 
     work under the table and do not pay taxes.
       They have little to fear even if they build up huge bank 
     accounts while working on the side. That is because the state 
     no longer does random computer searches of bank records to 
     find hidden assets.
       Such searches were performed under the administration of 
     Gov. Edward J. King and were credited with uncovering a 
     thousand fraud cases a month.
       In 1979, Legal Services sued to stop the practice, arguing 
     social workers should not be doing fraud investigations.
       As a result of the case, Gov. King created a separate fraud 
     unit, the BSI, to conduct the investigations.
       Welfare investigators now do bank searches only on a case-
     by-case basis, said Anthony Guglielmo, head of the union 
     representing BSI welfare fraud investigators.


                        spot checks discontinued

       Several years ago, some abuses that can now be uncovered by 
     computer checks might have been detected when social workers 
     visited welfare recipients' homes.
       Welfare commissioner Gallant said Gov. King stopped the 
     home visits. He agrees with the decision.
       ``It's an extremely inefficient system to go out and 
     randomly go into people's houses,'' Mr. Gallant said. ``Even 
     if a man is in there, she can say he is not her husband or 
     the father of her children.''
       He also said it was difficult keeping track of social 
     workers making home visits.
       The welfare department and BSI also fail to perform many 
     simple checks to verify information provided by welfare 
     applicants. In many cases, the welfare department operates 
     essentially on the honor system.
       The results can be startling when some basic checks are 
     performed.
       Last year, the welfare department launched a pilot study in 
     the Bowdoin Park welfare office in Boston, the state's 14th 
     busiest.
       Welfare workers were trained to look for signs of fraud 
     when interviewing applicants. Suspicious cases were referred 
     to a part-time BSI investigator.
       The Eagle-Tribune obtained a copy of an internal report on 
     the results of the first year of the experiment.
       It shows irregularities were substantiated in 62 of 134 
     cases referred for review--46 percent. In 49 cases, the 
     welfare application wound up being denied or withdrawn. 
     Taxpayers saved $523,372.
       Many bogus cases were discovered with a phone call.
       One call to a pregnancy clinic found an applicant lied 
     about being pregnant. In another case, an ``absentee'' parent 
     answered the phone at the applicant's home.
       The report came out last April but its lessons have yet to 
     be applied to the state's other 47 welfare offices.
       If each office was able to head off as much fraud as 
     Bowdoin Park did, taxpayers could save $24 million a year.
       Welfare officials now say they plan to act soon.


                        Businesswoman on welfare

       Welfare investigators can fail to catch cheats even when a 
     case falls into their lap.
       Carmen ``Cookie'' Hernandez was reported to welfare 
     investigators in 1986 by Lawrence Housing Authority 
     officials. The LHA discovered she owned a business while 
     collecting public assistance and living in subsidized 
     housing.
       But the matter was dropped.
       Instead, someone told Mrs. Hernandez that she had been 
     reported, a clear breach of welfare department rules. She 
     filed a complaint with her tenant representative.
       Today, LHA officials question whether the state cares about 
     fighting welfare fraud.
       ``What concerned us is when we have tenants in public 
     housing who are flaunting the system,'' LHA head Domenic 
     O'Neill said. ``We turned (the Hernandez case) over to 
     welfare and it was disregarded.''
       Mrs. Hernandez has been on and off the welfare rolls for 
     seven years.
       While receiving benefits and living at the Stadium Courts 
     project in Lawrence, Mrs. Hernandez operated the Hernandez 
     Shop, a bridal boutique at 317 Broadway, according to a 1986 
     business certificate she filed with the city.
       Now called ``Party World,'' it moved to 400 Broadway 
     earlier this year.
       At the time, her ex-husband owned a meat market. It closed 
     three years ago.
       Mrs. Hernandez went off welfare for a while in 1989 but 
     continued living in public housing while running her 
     business.
       In April of last year, LHA officials evicted her for non-
     payment of rent. She then went back on welfare while 
     continuing to operate the bridal shop.
       In a phone interview, Mrs. Hernandez, who now goes by her 
     maiden name of Carmen Vasquez, first denied ever owning a 
     bridal shop in Lawrence. She described herself as a hard-
     working mother of five who baked wedding cakes out of her 
     home.
       ``I've never done anything wrong,'' Mrs. Hernandez said. 
     ``I work at home . . . Everybody in Lawrence knows me for my 
     cakes.''
       Asked about city records listing her as owner of the bridal 
     shop as far back as 1986, Mrs. Hernandez said she owned the 
     store for three months in 1989 but sold it to her sister and 
     her sister's boyfriend.
       ``When I was the owner, I never collected welfare. I am not 
     so stupid as to put my name down as the business owner,'' she 
     said.
       People who did business with the bridal shop also identify 
     her as the owner.
       In 1990, Mrs. Hernandez and her husband took out a business 
     loan of more than $10,000 from Lawrence Savings Bank. Jeffrey 
     Leeds, vice president of the bank, said it was for the bridal 
     shop operated by Mrs. Hernandez and a delicatessen operated 
     by her husband.
       Bank officials later took the couple to Lawrence District 
     Court for failing to repay their loan. The bank won a $14,572 
     judgment but has received no money from the couple.
       ``We have not had a tremendous amount of success in 
     locating them,'' Mr. Leeds said.
       Phillip Lynch of Ipswich said Mrs. Hernandez operated the 
     bridal business when it was located in his building at 313 
     Broadway from 1991 until early this year.
       He said he sought to evict Mrs. Hernandez last year when 
     she fell behind in her rent. He said she owes $11,000.
       In March this year, while on welfare and despite her claim 
     her sister now owned the business, Mrs. Hernandez signed a 
     court settlement agreeing to pay $1,000 to Mr. Lynch. She 
     also agreed to move the shop from his building.
       Robert Avila, owner of the building where the bridal shop 
     is now located, also identified Mrs. Hernandez as the owner.
       ``She's the one who leases the building from me,'' Mr. 
     Avila said. ``I have a security deposit on her . . . She paid 
     July's rent in cash.''
       Mrs. Hernandez maintained she was acting for her sister in 
     her dealings with Mr. Lynch and Mr. Avila. She said her 
     sister had to return to the Dominican Republic because of 
     problems with U.S. immigration officials.
       ``That's not my money,'' she said. ``I don't have my name 
     on any papers.''
       Until recently, Mrs. Hernandez received $668 a month in 
     AFDC, plus $231 in food stamps and taxpayer-provided Medicaid 
     health insurance.
       Records show her welfare benefits were stopped on Sept. 12 
     when she failed to show up for routine review of her case 
     after The Eagle-Tribune began questioning her.
       Mrs. Hernandez told the newspaper in August she was headed 
     to Miami to enroll her daughter in school.


                             too many cases

       It is not know why the Hernandez case was not pursued.
       But investigators say there are too few of them and too 
     many cases.
       The number of welfare fraud investigators has been cut 35 
     percent in 10 years.
       There were 123 in 1983, the last year of Gov. King's term. 
     There are now 80.
       Gov. William F. Weld, despite his antifraud rhetoric, has 
     cut BSI's budget twice, prompting layoffs of fraud 
     investigators. Some were later rehired, and Mr. Weld this 
     year agreed to hire 12 new investigators to perform 
     background checks like the ones in the pilot project at 
     Bowdoin Hall.
       In the meantime, Lawrence has been cut from four to two 
     investigators.
       BSI director Fealy agreed Lawrence has a backlog of cases 
     but refused to cite the number, which others put at 2,000. He 
     also defended Gov. Weld's cuts. He said he believes ``the 
     smaller the government the better.''
       William McCarthy, the BSI supervisor for Lawrence, said one 
     of his investigators has more than 1,000 open fraud 
     referrals, 600 more than the state average.
       ``There is no way he can handle them,'' Mr. McCarthy said. 
     ``They all die on the vine. they have to die on the vine. 
     I've made this known.''
       BSI union president Guglielmo said the backlog in Lawrence 
     is not unique.
       Welfare offices in Brockton and the Grove Hall section of 
     Boston also have more than 2,000 open fraud cases, he said.
       He said the average BSI investigator completes 50 to 55 
     investigations a year. An investigator who can handle 100 is 
     considered special enough to get his name on a plaque at BSI 
     headquarters.
       Because of the backlog, he estimates 30 to 40 percent of 
     fraud referrals are dropped simply because the six-year 
     statute of limitations has run out.
       Mr. McCarthy said the overload hurts both the taxpayers and 
     the truly needy.
       ``The ironic thing is we have this fraud, the people who 
     are on it and need it, they don't get enough,'' he said. ``If 
     we got rid of some of this fraud then they might have more to 
     get by on.''

  Mr. Speaker, to recap tonight's articles, convicts serving time in 
prison can and are legally able to collect SSI benefits. One prisoner 
in Massachusetts collected $29,892 while behind bars. I have filed H.R. 
3251 to stop this practice. H.R. 3251 will end the practice of convicts 
collecting welfare from their prison beds. Also welfare in the United 
States is a system that often lets fraud go unpunished. This is on top 
of the fact that welfare is sadly becoming a way of life for many, both 
those who want go get off the system, and those who callously abuse it.
  Mr. Speaker, I hope the House will act quickly on H.R. 3251, to end 
the abuse of convicts collecting welfare and SSI benefits while in 
prison.
  I will continue reading this series at future special orders, next 
focusing on other convicts who have been subsidized by the welfare 
system.

                          ____________________